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OO RUEHWEB

DE RUEHBU #1580/01 3241939
ZNR UUUUU ZZH
O 191939Z NOV 08
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC IMMEDIATE 2500
RUEHC/DEPT OF LABOR WASHINGTON DC
RUCNMER/MERCOSUR COLLECTIVE
RUEHGV/USMISSION GENEVA 0737

UNCLAS BUENOS AIRES 001580 
 
USDOL FOR TMCCARTER 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ELAB PGOV AR
SUBJECT: ARGENTINA: SUPREME COURT RULING OPENS THE DOOR FOR TRADE 
UNION COMPETITION 
 
¶1. (SBU) SUMMARY: The Argentine Supreme Court declared Article 41 of 
the Trade Unions Law unconstitutional and upheld the right of a 
workers' union that lacks official legal recognition to elect its 
own delegates.  The ruling, if widely applied to organized labor, 
would expand representation rights to any labor delegate affiliated 
with unions simply registered with the Labor Ministry (MOL).  This 
could potentially increase competition among labor unions and 
threaten the monopolistic model of union representation in Argentina 
that has prevailed for more than 60 years.  General Labor 
Confederation (CGT) representatives immediately rejected the ruling, 
calling it ""a provocation that would cloud the social climate."" 
 
¶2.  (SBU) GOA officials swiftly sought to minimize the ruling's 
impact.  Labor Minister Carlos Tomada stated that the ruling would 
only apply to the specific case decided by the Supreme Court. 
Interior Minister Florencio Randazzo indicated that the ruling's 
applicability would be limited to the public sector.  Meanwhile, 
opposition parties are working on different initiatives either to 
reform the Trade Unions Law or to bring Article 41 in line with the 
Supreme Court's ruling.  However, the bills will most likely not 
pass in the Kirchner-controlled Congress.  END SUMMARY. 
 
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""SIMPLE"" REGISTRATION VS. LEGAL RECOGNITION 
------------------------------------------- 
 
¶3. (SBU) For over 60 years, Peronists have controlled the General 
Confederation of Labor (CGT), which has had a virtual monopoly over 
worker representation since state-structured unionization was first 
introduced by Labor Minister and then-President Juan Domingo Peron 
in the mid-1940s.  The CGT has approximately 3 million members, and 
represents over two-thirds of the unionized workforce. 
Approximately 40 percent of Argentina's workforce is unionized. 
 
¶4.  (SBU) Under Argentine law, the GOA recognizes two types of 
unions, each with a different set of rights: 1) unions that are 
simply registered with the MOL and have a limited scope of rights; 
and 2) unions that are not only registered with the MOL, but have 
also been officially recognized as the most representative union in 
a given sector.  Legally recognized unions can exercise a wider 
range of privileges, such as calling for elections to appoint 
delegates, exercising the right to strike, negotiating bargaining 
agreements, appointing delegates to international organizations, and 
compelling employers to directly deduct union dues from unionized 
workers' salaries.  For years, the government has only granted legal 
recognition to the CGT and its affiliates, although former President 
Nestor Kirchner and his wife, current President Cristina Fernandez 
de Kirchner, have flirted with the idea of granting legal 
recognition to a rival confederation known as the Argentine Workers 
Confederation (CTA) since 2003. 
 
------------------- 
A LANDMARK DECISION 
------------------- 
 
¶5. (SBU) In 2003, the Public Employees' Association (ATE), a 
CTA-affiliated union, was prevented from holding elections by the 
CGT-affiliated Civil Servants of the Armed Forces Union (PECIFA). 
PECIFA cited Article 41 of the Trade Unions law which stipulates 
that only state-recognized unions are entitled to call elections to 
vote for delegates, and that these delegates must be members of that 
union.  ATE filed a petition in protest that same year, and its 
petition was subsequently dismissed by both the Ministry of Labor 
and the Labor Court of Appeals. 
 
¶6. (SBU) On November 11, the Argentine Supreme Court deemed Article 
41 to be in breach of the constitution, which guarantees freedom of 
association and union democracy, as well as of several international 
conventions adopted by Argentina, including the International Labor 
Organization (ILO) Convention 87 on Freedom of Association and 
Protection of the Right to Organize.  (Note: Since 1989, the ILO has 
called on Argentina to reform its labor laws to bring it into 
compliance with Convention 87.)  In their ruling, the judges said 
""by favoring or not favoring a given trade union with respect to 
others, governments can influence workers' decisions when they 
select a union to join.""  In addition, the ruling asserted that the 
MOL's ""discretion"" in awarding official union recognition ""violates 
international treaties.""  The ruling, if broadly applied, would 
expand representation rights to labor delegates affiliated with 
unions that are simply registered with, but not legally recognized 
by, the Labor Ministry (MOL). 
 
--------------------- 
CTA HAILS DECISION... 
--------------------- 
 
¶7.  (SBU) The Supreme Court's decision surprised government 
 
officials and CGT and CTA representatives alike.  The CTA, which has 
been unsuccessfully demanding legal recognition by the MOL for 16 
years, celebrated the decision.  (Note: The CTA is an autonomous, 
politically non-partisan organization, with an estimated 1.5 million 
members, including public and private employees, as well as 
unemployed and retired people.)  The CTA and other labor groups not 
affiliated with the CGT had long contended that the Trade Unions Law 
guaranteed the CGT and its affiliated unions a virtual monopoly over 
unionized labor.  They argued that this contravened ILO Convention 
87 and prevented the CTA and CTA-affiliates from obtaining full 
legal standing.  Although the Supreme Court's decision refers 
specifically to Article 41 of the Trade Unions Law, several labor 
experts consider this a landmark decision as it upholds the 
supremacy of international treaties over domestic labor law.  CTA 
legal representative Horacio Meguira asserted that the decision will 
compel the Congress to amend the current Trade Unions Law in order 
to honor Argentina's international obligation to guarantee the right 
to freely organize. 
 
¶8.  (SBU) The GOA has considered the possibility of granting legal 
recognition to the CTA since Nestor Kirchner took office in 2003, 
and had relaxed some labor regulations to allow the CTA to gain 
extra rights in recent years, such as a seat on the Wage Council and 
on the Board of the National Institute of Social Services for 
Retirees and Pensioners (PAMI).  CTA lawyers say they believe the 
verdict not only cracks open the CGT's monopoly on worker 
representation, but also sets a precedent for legal rulings in favor 
of union freedom and democracy in future cases. 
 
---------------------------------------- 
...WHILE GOA SEEKS TO MINIMIZE IMPACT... 
---------------------------------------- 
 
¶9. (SBU) GOA officials swiftly sought to minimize the ruling's 
impact.  Labor Minister Carlos Tomada stated that the ruling would 
only apply to ATE, and indicated that unions that wanted similar 
treatment would have to go through the courts.  He dismissed 
outright the possibility of amending the Trade Unions Law.  Justice 
Minister Anibal Fernandez opined that the Supreme Court had resolved 
an abstract case between two unions in the public sector, and 
Interior Minister Florencio Randazzo stated that the decision was 
limited to civil servants in the public sector. 
 
----------------------------------- 
...AND THE CGT CALLS IT ""A MISTAKE"" 
----------------------------------- 
 
¶10. (SBU) CGT representatives strongly criticized the decision. 
Hugo Moyano, CGT Secretary General and Vice President of the 
Peronist Party (PJ), called the ruling ""a mistake.""  CGT spokesman 
Hector Daer said the confederation would accept the decision, but 
would urge the government to make a ""political decision regarding 
the issue.""  CGT Human Rights Secretary and leader of the Judicial 
Workers' Union Julio Piumato called it ""a provocation that would 
cloud the social climate.""  CGT Assistant Secretary Juan Belen 
characterized the decision as ""crazy"" and said it ""lacks common 
sense.""  Others stated the judicial decision seeks to divide the 
labor movement.  CGT legal representative and National Deputy of the 
Kirchners' ruling Victory Front coalition Hector Recalde blamed 
journalists for having ""distorted the Supreme Court's decision"" and 
defended current domestic regulations.  He warned that allowing 
several trade unions the power to represent workers in the same 
company or line of work could ""dilute the strength of unions, at a 
time when the economy is becoming increasingly concentrated."" 
 
¶11. (SBU) Moyano and other CGT leaders have been supportive of both 
Kirchner administrations and have even delayed or minimized labor 
demands to accommodate the government.  Energized by the Supreme 
Court decision as well as the prospect of imminent layoffs due to 
the expected economic downturn, CGT leaders have suddenly turned 
belligerent and are publicly calling for a 500 peso (US$155) 
year-end bonus for all workers plus restrictions on layoffs, 
including the imposition of double or triple severance pay on 
employers, in addition to calling on the GOA to circumscribe the 
impact of the Supreme Court decision. 
 
------------------------------------------- 
CHAMBERS OF COMMERCE BELIEVES DECISION WILL COMPLICATE LABOR 
RELATIONS 
------------------------------------------- 
 
¶12.  (SBU) Representatives of commercial and industrial chambers 
also expressed concern over the ruling, but for diametrically 
opposed reasons.  They predicted that competition among labor unions 
would result in tougher labor demands.  The President of the 
Argentine Industrial Chamber (UIA) Juan Carlos Lascurain said the 
chamber's legal team was analyzing the ruling, but opined that 
 
freedom of association is always a ""complicated"" issue.  The 
President of the General Economic Confederation (CGE) Guillermo 
Gonzalez Galicia said the decision would mean that industry would 
have to negotiate with more than one representative, each with 
different labor demands, making it even more difficult for industry 
to reach agreements with labor.  The President of the Argentine 
Confederation of Medium-Sized Companies (CAME), Mr. Osvaldo Cornide, 
echoed the sentiment, saying that small- and medium- size companies 
always benefited from negotiating with one union per sector, and 
that the ruling would imply labor relations chaos.  CTA lawyer 
Meguira downplayed these concerns saying that there are many 
examples where different unions have negotiated jointly with 
employers.   He cited seven unions in commercial air transport and 
12 in the maritime and ports sector as examples. 
 
--------------------------- 
Experts Praise the Decision 
--------------------------- 
 
¶13. (SBU) Labor and constitutional experts alike praised the Supreme 
Court's Decision.  Enrique Rodriguez, former Labor Minister under 
ex-President Carlos Menem, opined that the ruling would allow more 
than one union per sector to obtain legal recognition. 
Constitutional scholar Daniel Sabsay said it would eliminate 
monopoly control over labor relations and encourage greater 
democracy in trade union activity.  Both Sabsay and Rodriguez agreed 
that the CTA should now receive legal recognition. 
 
----------- 
NEXT STEPS 
----------- 
 
¶14. (SBU) While Labor Minister Tomada denied any plans to amend the 
current Trade Unions Law, Senator Gerardo Morales, the Chairman of 
the Labor and Social Security Committee in the Senate and Head of 
the opposition Radical Party (UCR), announced his intention to amend 
current regulations to establish freedom of association and 
affiliation, ensure internal democracy in trade unions, allow 
minority representation in unions, prohibit reelection of labor 
leaders, and demand greater transparency in the management of union 
funds and union-managed healthcare organizations.  Radical Deputy 
Miguel Giubergia introduced a bill on November 14 to bring Article 
41 of the current Trade Union Law in line with the Supreme Court's 
ruling.  Other opposition blocs like the Civic Coalition, dissident 
Socialists, and leftist groups are drafting their own bills to 
establish a more democratic labor union system.  Meanwhile, FPV 
Deputy and CGT lawyer Recalde said he is working on a bill to limit 
the ruling's impact, although the CFK administration and FPV 
Congressional leaders have not yet backed this initiative publicly. 
Although opposition blocs are enthusiastic about reforming the Trade 
Unions Law, their initiatives will most likely not pass in the 
Kirchner-controlled Congress. 
 
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COMMENT 
------- 
 
¶15.  (SBU) The Supreme Court's ruling demonstrates that judicial 
independence still has a pulse in Argentina.   The ruling attacks 
the core of this country's Peronist-corporatist Model, seeking to 
check the previously unchallenged power of the CGT.  If applied 
broadly, the ruling not only threatens CGT hegemony over labor 
relations, but also the very foundation upon which Peronism is 
based.  Argentina's trade union system has long been the central 
pillar of the corporatist model put in place by Peron 60 years ago, 
and it has successfully resisted reform efforts by military and 
democratic governments seeking a more pluralistic system for over 
half a century.  It is not surprising that the CGT and, the current 
neo-Peronist government will seek to limit the ruling's 
applicability, but the Court's decision could be a positive step if 
it helps introduce greater competition, democracy, and transparency 
into Argentina's labor movement.  END COMMENT. 
 
WAYNE